By Peter Egwuatu

Value of  Collective Investment Schemes, CIS, rose 37.6 per cent, year-on-year, to  N2.034 trillion in September this year from N1.478 trillion recorded in the corresponding period of 2022.

Vanguard findings in the latest data of CIS released  by the Securities and Exchange Commission (SEC) show that the Net Asset Value, NAV, of registered professionally-managed CIS rose by N556 billion or 37.6% to N2.034 trillion on 22nd  September 2023 from N1.478 billion on 23rd  September 2022.

According to SEC categorization, CIS includes Mutual Funds, Exchange-Traded Funds (ETFs) and Specialist Fund (SF).

CIS  are joint investment vehicles through which investors pool funds and invest in a chosen basket of securities to optimise returns and reduce risks.

They are typically managed by SEC-registered fund management firms alongside other professional parties such as trustees and custodians that provide additional supervision on the fund management.

CIS  are usually categorised by the class of assets that forms the primary focus of their investments. Thus, there are equity funds, money market funds, bond funds, real estate funds, ethical funds, index funds, mixed funds and infrastructure funds, among others.

Cordros Capital, one of the Lagos based investment banking firms that manages such   funds, said collective investments allow investors to reduce their risks and optimise the potential for higher returns by investing in a mix of asset classes in line with their risk horizon and targets.

According to the report, the net asset value, NAV,   of mutual funds grew   39.2% to N1.93 trillion in September 2023 from N1.386 billion in September 2022.  

ETFs recorded growth in NAV  to N9.456 billion from N6.862 billion while the NAV of   Infrastructure Funds rose   to N94.55 billion on September 22, 2023 from N84.931 billion in   September 23rd  2022.

Further breakdown of the funds indicated that investors showed stronger preference for funds that invest generally in money market instruments and other fixed-income securities during the period under review.

Specifically, the NAV of money market funds rose to N842.9 billion in September 2023 from N560.4 billion in September 2022. Dollar funds followed as the second largest group rising to N579.2 billion from N322 billion.

Bond funds, which invest solely in sovereign and other approved bonds, declined by 22.4% to N302.3 billion from N389.6 billion.